Preferably than endorsing cryptocurrencies like Bitcoin (BTC) and Ethereum (ETH), many governments seek to launch their own central bank-backed digital currencies (CBDC). Japan is the latest to join the race.
The Bank of Japan (BOJ) announced on Monday that it would start testing on its CBDC. In phase 1 of the experiments, the apex bank will focus on trying the digital asset’s primary function as a financial instrument, especially in issuance, distribution, and redemption.
The first phase of the experiments will last until March 2022. Upon completion, BOJ will proceed to Phase 2, which seeks to test the digital asset’s more elaborate functions. If required, the bank will move to a third phase, in which end-users and private businesses will be called upon to test the pilot program.
Shinichi Uchida, the bank’s executive director, said last month that there were no current plans to launch a CBDC in Japan. However, they were getting prepared in case the need arises. He explained:
We believe that initiating experiments at this stage is a necessary step,” Uchida said at the time. “Given the current factors at play, including technological developments at home and abroad, there is a reasonable possibility for CBDC to provide a means of payments and settlements and for such systems to become global standards.
The narrative in several crypto circles is that governments would try to launch CBDCs as contenders to decentralized cryptocurrencies to retain their control over financial markets. Billionaire Ray Dalio is one of those who have repeatedly sounded the alert that governments would move to kill cryptocurrencies.
To receive the latest breaking Crypto News delivered to you, join Cryptonetwork.News Telegram Channel here